Michael Marks
CEO, Flextronics
About ten years ago, right after NAFTA took effect, I had the idea of locating a Flextronics manufacturing plant in Mexico. I clearly remember people saying to me, "Don't do it. That's a siesta culture," implying that any labor or other cost savings to be gained there would be offset by the workers' laziness. I made a trip anyway and checked out three factories, one making cables for the auto industry, one making toasters, and one doing electronic assembly. I came away thinking, "It's not humanly possible to work harder than these people or to produce products faster than this." We built a plant near Guadalajara in 1997, and within five years, its revenues grew to more than $1 billion.
I tell the story because it underscores the corrosive effect of stereotypes and how they undermine good decision making in a business that needs to globalize. To me, the most important criterion for a business leader is that he or she be free of such strong biases. If I heard evidence of that kind of stereotyping in conversations with a job candidate, that would be a big red flag.
Usually, of course, the stereotyping is more subtle. Managers often pick up the impression that the Chinese are good at this, the Germans are good at that, and so on. But I have learned that in every place we operate, in every country, the people want to do a good job. They simply need training. If you show people, for instance, what great manufacturing is, they will work toward it—and I have found that there is no place where people can't do a world-class job.
| I have learned that in every place we operate, in every country, the people want to do a good job. |
| — Michael Marks, Flextronics |
This isn't to say that we approach every region with a cookie-cutter uniformity. We may need to train workers differently in different parts of the world. We discovered this early on in Guadalajara because the demographics of Mexico are very young—a large percentage of the workforce is under the age of thirty-five. The contrast with Japan, a country with a relatively old workforce, is striking. Training becomes a different proposition when you cannot rely on tacit knowledge transfer from seasoned fifty-year-olds to greener thirty-year-olds. Mexico might require a more intense training regimen or a longer time commitment.
Running a global company also means learning how different countries are governed, and being able to work with their leaders. This is particularly true for a manufacturer like Flextronics, because most countries, whether developing or developed, tend to want the manufacturing jobs we have to offer. As a consequence, we must be in frequent contact with senior government officials, addressing issues like tax holidays and dollars for training. Consider an issue that the head of our European operation is currently dealing with. A few years back, the Hungarian government agreed to give us a ten-year tax holiday as the result of a $50 million capital investment there. The problem is, Hungary is now trying to gain admittance to the European Union, which won't allow such tax holidays. What will we do about this? It will get worked out, but it's complicated. The head of European operations has to have the skills to deal with such high-level political issues—skills that don't develop in people automatically.
How do we choose leaders with the cultural breadth to conduct such negotiations—and to get past the kind of stereotypes I discussed earlier? The most capable executives I've known have traveled extensively, learned other languages, and have often been educated abroad. But most of them gained their broad perspectives in the course of their work. Flextronics' top management team orchestrates manufacturing activity in twenty-eight different countries and leads sales operations worldwide. The peer group includes a CFO from New Zealand, a CTO from Grenada, a sales executive from Ireland, and business unit heads from Sweden, Great Britain, India, Singapore, and Hong Kong. It's hard to work in such an environment and remain provincial in your outlook.
Increasingly, though, we are seeing that our more junior executives have this kind of multicultural exposure as part of their upbringing. Today's thirty-year-olds grew up in a different world from their parents', with much greater ease of travel, more education abroad, and technologies like the Internet and cell phones affording more lines of global communication. Dream résumés that show, say, an upbringing in Paris, a Harvard MBA, and summer internships in Japan are becoming more and more common among young job applicants.
As a result, there is much more uniformity among young managers around the world. Imagine pulling together thirty people from thirty different countries, all in their thirties. Chances are, they would all interact quite easily—and that isn't because young people tend to be fairly open-minded. It's because there's been a major shift in thinking from the last generation. And that shift will make the task of developing global leaders easier with each passing year. In another two decades, an American is not going to stop to consider that he is dealing with someone from Japan. A strong leader will be just that—a strong leader—whether Brazilian or Malaysian. The global part of leadership will be a given.
Daniel Meiland
Executive Chairman, Egon Zehnder International
The world is getting smaller, and markets are getting bigger. In my more than twenty-five years in the executive search profession, we've always talked about the global executive, but the need to find managers who can be effective in many different settings is growing ever more urgent. In addition to looking for intelligence, specific skills, and technical insights, companies are also looking for executives who are comfortable on the world stage.
And yet we have a lot to learn. Over the years, about half of our big searches have been for people with truly international experience, but in only a small fraction of those cases did we end up hiring foreigners to the country where an organization was based. Many companies haven't been all that successful at developing global executives from within either. The intentions are good, but the fact is, practice hasn't caught up with intent.
One problem is that many companies still believe the best way to help managers develop a global mind-set is to put them in positions in other countries. But that hasn't been very effective, primarily because companies station people abroad and then forget about them. If anything, advancement is even more difficult for the expat when he returns to headquarters, having missed out on opportunities to network with top management. Also, many people have reasons for not wanting to hop from location to location. For one, it's easier to develop client relationships if you stay in one place for an extended period of time. Those client relationships can be very important when it comes to getting promoted.
The companies that do handle these rotations well—Shell and General Electric come to mind—track their people carefully over the course of many years. GE has systems for examining people's work histories and designing their next steps toward becoming global leaders. And Shell has done a particularly good job of giving people not only major responsibilities abroad but also great opportunities for advancement when they return. Another example is McKinsey consulting, which in 1994 elected Rajat Gupta as the first non-American to run the firm. Gupta is a truly global executive and has shown a great deal of cultural sensitivity.
| One problem is that many companies still believe the best way to help managers develop a global mind-set is to put them in positions in other countries. |
| — Daniel Meiland, Egon Zehnder |
Cultural sensitivity doesn't always come naturally, so developing global executives often requires helping people to see their own biases. Many years ago, when I first started at Egon Zehnder International, I was working on an assignment in the greater China area, and I criticized a team member directly for the way he handled a project. I was told later that in China it's not good to criticize someone face-to-face; it ends up being counterproductive, and there are other ways to get the message across. This is fairly common knowledge today, but back then it was not. The feedback I got was critical to developing my own cultural sensitivity.
But while you need to be aware and accepting of cultural norms, you also need to remember that people are pretty much the same everywhere. The respect you must show for different cultures isn't all that different from the respect you must show to people in your own culture. The executive who truly respects his employees and peers as human beings will always win. Find reasons to praise performance and to show a real interest in your employees—not just when and where it matters to you personally, say, at headquarters, but with everyone, at every level. And you should always be genuine.
Developing a global mind-set and learning about other cultures are important for your career, of course, but they're also enriching on a very personal level. We all need to experience other cultures and ideas to grow as individuals. And to some degree, that individual growth intertwines with the professional. An American, the new CEO of Zurich Financial brought with him a true and very personal love of various cultures. And he came from a very different industry—consulting and auditing. Put together, his diverse personal and professional experiences have given him unique and insightful perspectives on the company's challenges.
We're living in a special time, with our minds on war and terrorism, and we're losing sight of the reality of globalization. But we should pay attention, because national barriers are quickly coming down. If you look ahead five to ten years, the people with the top jobs in large corporations, even in the United States, will be those who have lived in several cultures and who can converse in at least two languages. Most CEOs will have had true global exposure, and their companies will be all the stronger for it.